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What Is Moving the Markets

Conflicting moves and a lack of coordination hampered Beijing's initial response to its stock-market rout, raising questions about whether Chinese authorities will be up to the challenge of implementing market changes.

Econintersect: CoreLogic's Home Price Index (HPI) shows that home prices in the USA are up 6.5% year-over-year year-over-year (reported up 1.7% month-over-month). There is considerable backward revision in this index which makes monthly reporting problematic. CoreLogic HPI is used in the Federal Reserves's Flow of Funds to calculate the values of residential real estate.

SHANGHAI/HONG KONG (Reuters) - China stepped up a crackdown on short-selling of shares on Tuesday, unveiling rules that make it harder for speculators to profit from hourly price changes, as some of the nation's major brokerages suspended their short-selling businesses.

LONDON (Reuters) - London-listed group Shire said it was seeking to buy Baxalta in a $30 billion all-share deal, going public with its bid to create a global specialist in rare diseases after the U.S. firm spurned its initial approach.

BEIJING (Reuters) - Alibaba Group Holding Ltd has hired former Goldman Sachs Group Inc partner Michael Evans to oversee the e-commerce company's international expansion, a top priority as the firm looks beyond China to sustain its heady growth rates.

Chinese aluminum producers aren't curbing their output despite the metal's slump to a six-year low, suggesting the price of one of the world's most heavily-traded metals still has far to go before finding a floor.

If one had to summarize the "new economy", which supposedly this time is different than the last time the US had a "new economy", in just one chart, it would be the following one which lists the 10 biggest "unicorns", or startups worth more than $1 billion, a list headed by Uber (which last week reported its latest record valuation of $51 billion, up from $17 billion exactly one year ago), and continuing with names which are more a marketing gimmick than an actual business model.

A few quick observations: the top 10 highest valued companies have a combined private valuation of $156 billion, on just about $4 billion in revenues and employ a whopping 19.5 thousand people.

In other words, the universe's combined historical Price/Sales ratio is 39x and each employee is worth about $8,000,000.

Here's hoping to the absolutely astronomical growth that these privately priced to perfection companies will need in order to justify their ridiculous valuations... just as the Fed prepares to hike rates and lead to what many know, but won't admit, will be a recession in a few years (if one hasn't started already).

Policymakers disagree over whether central banks should use interest rates to curb leverage and asset price booms. Higher interest rates make mortgages more expensive and could prevent borrowers from bidding up house prices to create a boom. However, rough calculations show that the size of rate increase needed to do so might also boost unemployment and push down inflation. Thus, using this type of policy tool may cause the central bank to deviate significantly from its goals of full employment and price stability.

The July 2015 Senior Loan Officer Opinion Survey on Bank Lending Practices indicated that, on balance, banks reported little change in their standards on commercial and industrial loans in the second quarter of 2015. In addition, banks reported having eased some loan terms, such as spreads and covenants, especially for larger firms on net.

(Reuters) - The U.S. Department of Justice is investigating trades worth billions of dollars that Deutsche Bank AG made on behalf of Russian clients, a person familiar with the situation told Reuters on Tuesday.

After a lukewarm start by the Chinese "market", which had dropped for the past 6 out of 7 days despite ever escalating measures by Beijing to manipulate stocks higher, finally the Shanghai Composite reacted favorably to Chinese micromanagement of stock prices and closed 3.7% higher as Chinese regulators stepped up their latest measures by adjusting rules on short-selling in order to reduce trading frequency and price volatility, resulting in several large brokerages suspending short sell operations. At this pace only buy orders will soon be legal which just may send the farce of what was once a "market" limit up.

Elsewhere in Asia, equities traded mixed following a lackluster Wall Street close amid further declines in commodity prices, after Brent crude dropped below $50/bbl for the first time since January, only to rebound in overnight trade. ASX 200 (+0.3%) traded in the green with gains in financials offsetting losses seen in commodity names. Elsewhere, the Nikkei 225 closed lower by 0.1% while JGBs rose following the latest 10-yr auction which drew highest b/c since Jan with 10-yr yields at a 9-week low.

Speaking of "buy only" trading, Greece may want to consider that soon because on the second day after reopening its market for trading, Greek banks traded limit down for the second day in a row. End result: banks such as Piraeus is now down over 50% in two days.

This is Piraeus Bank -51% in two days... We need a name for this chart. pic.twitter.com/x05r9omPEN

ATHENS (Reuters) - Greece expects to conclude a bailout deal with international lenders by Aug. 18, with the drafting of the accord starting on Wednesday, government spokeswoman Olga Gerovasili said on Tuesday.

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